Day Trading & Forex Forum

alphahunter

Hi, I'm a newbie on Options, my background is UK/European small caps. I know I should read a couple of primers on the subject before I start posting, but I am intrigued by this.

IG index quoted today (Sept 3rd - @ 21:42pm) the following:
FTSE 100 Call September 5500 : 99.5
FTSE 100 Put September 5500 : 90.4
and the synthetic index (out of hours) is bang on 5500.

What could justify the asymetry in the two prices? That more options traders expects the FTSE to go up than down? Is there anything more to it?

That's my first post, I'm looking forward to read the replies. Next post on binaries soon.

Thanks
Alphahunter

jcmh

Not sure really. A couple of things to consider are;
How often is the synthetic index updated (Which one are you looking at)
For instance, it may be every 30 secs, and in the mean time Rio & BHP have fallen in Australian trade, dragging the FTSE down a few ticks.

alphahunter

Hi JCMH
What I mean by synthetic is the mid-price of the bid/offer on FTSE100 that IG Index quotes at that time of the day (after US's close), e.g a "construction" by IG Index, so updated straight away if and when Rio & BHP falls in Australian trade I suppose.

It is a bit like a binary bet that would not be centered on 50 at the strike.

Why this inconsistency between their set of quotes? Why the skew?


Alphahunter

Hoggums

I'm no expert on options but volatility curves are rarely semetrical and that would account for some of the skew on the price. Particularly if they were still using previous days EOD vol curve.

__________________
Hoggums

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gooseman

simply skew